Published: March 14, 2011
GeoEye Reports Fourth Quarter and Fiscal Year 2010 Earnings Results
DULLES, Va., March 14, 2011 /PRNewswire/ -- GeoEye, Inc. (Nasdaq: GEOY), a premier provider of superior satellite and aerial geospatial information and services, announced today results for its fiscal fourth quarter and fiscal year ended Dec. 31, 2010.
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"We had a very successful year, met our corporate goals and delivered 22 percent revenue growth and strong margins," said Matt O'Connell, GeoEye's chief executive officer and president. "We won a ten-year, multi-billion-dollar award from the National Geospatial-Intelligence Agency (NGA); launched our Web dissemination services platform, EyeQ(TM); and acquired SPADAC, now renamed GeoEye Analytics, the leader in the field of predictive geospatial analytics. In 2011, we'll build on these significant achievements by focusing on the construction of our next-generation, high-resolution satellite, GeoEye-2, and increasing our value-added information services and product offerings to our expanding customer base."
FOURTH QUARTER RESULTS
Total revenues were $82.5 million for the fourth quarter of 2010, a 12.7% increase from $73.2 million for the fourth quarter of 2009. The net income available to common stockholders for the fourth quarter of 2010 was $15.2 million, or $0.68 per fully diluted share, compared to net income of $11.7 million, or $0.55 per fully diluted share, for the fourth quarter of 2009. Adjusted net income available to common stockholders (a non-GAAP measurement that excludes the impact of non-operating charges, gains and one-time charges and tax benefits) for the fourth quarter of 2010 was $9.5 million, or $0.42 per diluted share, as compared to $6.8 million, or $0.32 per diluted share in the fourth quarter of 2009.
Domestic revenues were $60.4 million for the fourth quarter of 2010, which were 73.2% of total revenues for the period. International revenues were $22.1 million for the fourth quarter of 2010, which were 26.8% of total revenues for the period. Domestic revenues increased 5.2% for the fourth quarter of 2010, compared to the same period in 2009. International revenues increased 40.0% for the fourth quarter of 2010, compared to the same period in 2009.
Operating profit was $23.7 million for the fourth quarter of 2010, a $4.3 million increase from $19.4 million for the fourth quarter of 2009. Operating margin was 28.7% for the fourth quarter of 2010, compared to 26.4% in the same period in 2009. Adjusted EBITDA (a non-GAAP measurement defined as net income before interest, taxes, depreciation, amortization, non-cash recognition of stock compensation expense and other items) increased approximately $7.0 million, to approximately $43.7 million for the fourth quarter of 2010, from $36.7 million the same period in 2009.
The Company ended the fourth quarter of 2010 with unrestricted cash, cash equivalents and short-term investments of $333.4 million; total assets of approximately $1.3 billion; stockholders' equity of $443.2 million and long-term debt of $508.2 million.
TWELVE MONTH RESULTS
Total revenues for the twelve months ended Dec. 31, 2010, were $330.3 million, a 21.9% increase from $271.1 million in the twelve months ended Dec. 31, 2009. The Company's Adjusted EBITDA for the twelve-month period ended Dec. 31, 2010, was $176.9 million, an increase of 33.9% from the $132.2 million reported in the same period in 2009. GAAP net income available to common stockholders for the twelve months ended Dec. 31, 2010, was $22.7 million, or $1.02 per fully diluted share, as compared to GAAP net income available to common stockholders of $32.1 million, or $1.55 per fully diluted share, in the same period of 2009.
Adjusted net income available to common stockholders for the twelve months ended Dec. 31, 2010, was $44.3 million, or $1.99 per diluted share, as compared to $25.4 million, or $1.23 per diluted share for the twelve months ended Dec. 31, 2009, excluding the impact of non-operating charges, gains and one-time charges and tax benefits in both periods.
FOURTH QUARTER AND FISCAL YEAR 2010 OPERATING HIGHLIGHTS
-- Significant new contract award
-- On Aug. 6, 2010, the Company was awarded a contract for up to $3.8
billion from the NGA under the EnhancedView program. The period of
performance for the EnhancedView contract is 10 years. It began on
Sept. 1, 2010, and continues through Aug. 31, 2011, with nine
one-year options.
-- GeoEye-2 construction
-- Under the terms of the EnhancedView award, the NGA will contribute
up to $337.0 million of the overall construction costs of GeoEye's
next-generation satellite, GeoEye-2.
-- During the year, the Company invested $243.1 million for the
continued development and construction of the GeoEye-2 satellite. To
date, the Company has invested $309.9 million in the GeoEye-2
satellite program.
-- Additional cash proceeds
-- On Sept. 22, 2010, the Company completed a convertible preferred
stock sale to Cerberus Capital Management, L.P., which generated
proceeds of $78.0 million.
-- On Oct. 1, 2010, the Company issued $125.0 million of 8.625% Senior
Secured Notes due 2016. The proceeds of $121.0 million will be used
for general working capital purposes.
-- Information services developments
-- On Sept. 30, 2010, the Company launched the commercial EyeQ service
to provide Web mapping services to commercial customers.
-- On Dec. 15, 2010, the Company completed the acquisition of SPADAC,
now called GeoEye Analytics, the industry leader in the field of
predictive analytics. GeoEye Analytics has approximately 170
employees who work at over 40 federal defense and intelligence
agencies.
FIRST QUARTER AND FISCAL YEAR 2011 FINANCIAL OUTLOOK
The Company expects revenues for the first quarter of 2011 to be in the range of $86 to $90 million with an Adjusted EBITDA of $42 to $45 million and earnings per share of $0.37 to $0.45.
For the full year, the Company expects revenues to be in the range of $360 to $380 million with Adjusted EBITDA of $170 to $185 million and earnings per share of $1.70 to $2.00.
These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time.
CONFERENCE CALL INFORMATION
GeoEye, Inc. (NASDAQ: GEOY) will host a conference call for investors and analysts to discuss financial results for the fourth quarter and 2010 fiscal year, which ended Dec. 31, 2010.
When: March 15, 2011, at 8:30 a.m. Eastern Daylight Time
To Participate:
To participate in the call via phone, domestic callers may dial toll-free 1-877-776-4039 approximately 10 minutes prior to the start time. International callers may dial 1-631-291-4808. Callers may identify themselves to the operator as GeoEye conference call participants or by using the conference ID number: 40408544. Questions will be accepted from phone participants during the live call after prepared remarks and as time permits.
The conference call will also be webcast on the "Investor Relations" section of the Company's corporate Web site, www.geoeye.com. To directly access the live webcast go to: http://www.geoeye.com/CorpSite/corporate/investor-relations/Default.aspx and click on the "March 15, 2011 Investor Update Webcast" link. Please allow 15 minutes before the scheduled start time to register, download and install any necessary audio software.
Replay:
An audio replay of the fourth quarter conference call will be available through midnight March 22, 2011, by dialing (800) 642-1687 and typing in the conference ID number: 40408544.
An archived webcast of the conference call will be available at the same URL address approximately two hours after the conclusion of the call.
Selected financial results for the Company are as follows (dollars in thousands, except earnings per share):
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months
Ended
------------
12/31/10 12/31/09 Change
-------- -------- ------
(unaudited)
Revenues $82,543 $73,249 $9,294
Operating expenses:
Direct costs of revenue (exclusive
of depreciation and amortization) 26,105 24,458 1,647
Depreciation and amortization 16,677 16,423 254
Selling, general and administrative 16,067 13,014 3,053
------ ------ -----
Total operating expenses 58,849 53,895 4,954
------ ------ -----
Income from operations 23,694 19,354 4,340
Interest expense, net (6,204) (8,181) 1,977
Gain from investments 2,500 - 2,500
Loss from early extinguishment of
debt - (27,127) 27,127
Income (loss) before provision for
income taxes 19,990 (15,954) 35,944
(Provision) benefit for income
taxes (1,900) 27,673 (29,573)
Net income 18,090 11,719 6,371
Preferred stock dividends (1,008) - (1,008)
------ --- ------
17,082 11,719 5,363
Income allocated to participating
securities (1,871) - (1,871)
------ --- ------
Net income available to common
stockholders $15,211 $11,719 $3,492
======= ======= ======
Earnings per share
Basic $0.70 $0.60 $0.10
===== ===== =====
Diluted $0.68 $0.55 $0.13
===== ===== =====
Weighted average shares basic 21,855 19,373
====== ======
Weighted average shares diluted 22,523 21,139
====== ======
Year Ended
----------
12/31/10 12/31/09 Change
-------- -------- ------
(unaudited)
Revenues $330,345 $271,102 $59,243
Operating expenses:
Direct costs of revenue (exclusive
of depreciation and amortization) 104,010 94,693 9,317
Depreciation and amortization 65,262 57,166 8,096
Selling, general and administrative 57,451 46,608 10,843
------ ------ ------
Total operating expenses 226,723 198,467 28,256
------- ------- ------
Income from operations 103,622 72,635 30,987
Interest expense, net (27,918) (31,020) 3,102
Other non-operating expense (24,466) - (24,466)
Gain from investments 3,200 - 3,200
Loss from early extinguishment of
debt (37) (27,127) 27,090
Write-off of prepaid financing
costs (6,412) - (6,412)
Income before provision for income
taxes 47,989 14,488 33,501
(Provision) benefit for income
taxes (23,352) 17,573 (40,925)
Net income 24,637 32,061 (7,424)
Preferred stock dividends (1,107) - (1,107)
------ --- ------
23,530 32,061 (8,531)
Income allocated to participating
securities (783) - (783)
---- --- ----
Net income available to common
stockholders $22,747 $32,061 $(9,314)
======= ======= =======
Earnings per share
Basic $1.05 $1.71 $(0.66)
===== ===== ======
Diluted $1.02 $1.55 $(0.53)
===== ===== ======
Weighted average shares basic 21,622 18,753
====== ======
Weighted average shares diluted 22,250 20,685
====== ======
CONSOLIDATED BALANCE SHEETS
(in thousands)
December December
31, 31,
2010 2009 Change
---- ---- ------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $283,233 $208,872 $74,361
Short-term investments 50,124 - 50,124
Accounts receivable -trade
and unbilled receivables
(net of allowances: 2010 -
$957; 2009 -$923) 42,868 32,578 10,290
Income tax receivable 34,385 40,237 (5,852)
Restricted cash 3,952 52,268 (48,316)
Prepaid expenses and other
current assets 16,183 16,836 (653)
Total current assets 430,745 350,791 79,954
Property, plant and
equipment, net 36,591 25,381 11,210
Satellites and related
ground systems, net 696,459 505,035 191,424
Goodwill 71,568 34,264 37,304
Intangible assets, net 14,943 11,685 3,258
Non-current restricted cash 10,822 13,653 (2,831)
Other non-current assets 7,957 6,398 1,559
Total assets $1,269,085 $947,207 $321,878
========== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $70,936 $33,997 $36,939
Current portion of deferred
revenue 50,533 52,221 (1,688)
Current deferred tax
liabilities 6,656 4,744 1,912
Current portion of long-
term debt - 497 (497)
Total current liabilities 128,125 91,459 36,666
Long-term debt 508,160 380,594 127,566
Long-term deferred
revenue, net of current
portion 161,673 192,313 (30,640)
Non-current income tax
reserve 626 248 378
Deferred tax liabilities 21,336 2,078 19,258
Other non-current
liabilities 5,922 560 5,362
Total liabilities 825,842 667,252 158,590
------- ------- -------
Commitments and
contingencies - - -
Stockholders' equity:
Series A convertible
preferred stock 1 - 1
Common stock 221 199 22
Additional paid-in capital 367,723 227,988 139,735
Retained earnings 75,298 51,768 23,530
Total stockholders' equity 443,243 279,955 163,288
------- ------- -------
Total liabilities and
stockholders' equity $1,269,085 $947,207 $321,878
========== ======== ========
CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION
(in thousands)
Year Ended
----------
12/31/10 12/31/09 Change
-------- -------- ------
(unaudited)
Net cash provided by operating
activities $126,693 $100,207 $26,486
Net cash used in investing
activities (265,921) (123,034) (142,887)
Net cash provided by financing
activities 213,589 124,966 88,623
Net increase in cash and cash
equivalents 74,361 102,139 (27,778)
Cash and cash equivalents,
beginning of period 208,872 106,733 102,139
Cash and cash equivalents, end of
period $283,233 $208,872 $74,361
======== ======== =======
ADJUSTED EBITDA
(in thousands)
Three Months
Ended Year Ended
------------ ----------
12/31/10 12/31/09 12/31/10 12/31/09
-------- -------- -------- --------
Net income $18,090 $11,719 $24,637 $32,061
Adjustments:
Interest expense, net 6,204 8,181 27,918 31,020
Loss from early
extinguishment of
debt - 27,127 37 27,127
Write-off of prepaid
financing costs - - 6,412 -
Income tax provision
(benefit) 1,900 (27,673) 23,352 (17,573)
Depreciation and
amortization 16,677 16,423 65,262 57,166
Non-cash stock-based
compensation expense 2,192 876 6,877 2,371
Non-cash change in
fair value of
financial instrument - - 24,466 -
Gain from sale of
investment (2,500) - (3,200) -
Acquisition costs 1,167 - 1,167 -
Adjusted EBITDA $43,730 $36,653 $176,928 $132,172
======= ======= ======== ========
Adjusted EBITDA is a non-GAAP financial measure that represents net
income (loss) before net interest income or expense, income tax
expense (benefit), depreciation and amortization expenses, non-cash
stock-based compensation expense and other items. We believe that
Adjusted EBITDA provides useful information to investors because it
is an indicator of the strength and performance of our ongoing
operations. However, Adjusted EBITDA is not a recognized term under
financial performance under GAAP, and our calculation of Adjusted
EBITDA may not be comparable to the calculation of similarly titled
measures of other companies.
ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS AND ADJUSTED
DILUTED EPS
(in thousands, except per share amounts)
Three Three
Months Months
Ended Ended
12/31/10 12/31/09
-------- --------
Net income available to common
stockholders $15,211 $11,719
Adjustments:
Loss from early extinguishment of debt - 27,127
Gain from investments (2,500) -
Acquisition costs 1,167 -
Impact of adjustments on income allocated
to participating securities 703 -
Adjustment to normalize provision for
income taxes (5,085) (32,030)
Adjusted net income available to common
stockholders $9,496 $6,816
====== ======
Adjusted fully diluted shares 22,523 21,139
Adjusted diluted EPS $0.42 $0.32
===== =====
Year Ended Year Ended
12/31/10 12/31/09
-------- --------
Net income available to common
stockholders $22,747 $32,061
Adjustments:
Non-cash change in fair value of
financial instrument 24,466 -
Loss from early extinguishment of debt 37 27,127
Write-off of prepaid financing costs 6,412 -
Gain from investments (3,200) -
Acquisition costs 1,167 -
Impact of adjustments on income allocated
to participating securities (740) -
Adjustment to normalize provision for
income taxes (6,628) (33,803)
Adjusted net income available to common
stockholders $44,261 $25,385
======= =======
Adjusted fully diluted shares 22,250 20,685
Adjusted diluted EPS $1.99 $1.23
===== =====
Adjusted Net Income Available to Common Stockholders is a non-GAAP
financial measure that represents net income available to common
stockholders before other items, net of tax. Adjusted Diluted EPS
is a non-GAAP financial measure that represents fully diluted
earnings per share before other items, net of tax. We believe that
Adjusted Net Income Available to Common Stockholders and Adjusted
Diluted EPS, using a normalized tax rate to 39%, provide useful
information to investors because they allow investors to evaluate
our performance for different periods on a more comparable basis by
excluding items that are not related to the ongoing operations of
our business. However, Adjusted Net Income Available to Common
Stockholders and Adjusted Diluted EPS are not recognized terms under
financial performance under GAAP, and our calculation of Adjusted
Net Income Available to Common Stockholders and Adjusted Diluted EPS
may not be comparable to the calculation of similarly titled
measures of other companies.
About GeoEye
GeoEye, Inc. is a leading international information services company serving government and commercial markets. The Company is recognized as one of the geospatial industry's imagery experts, delivering exceptional quality imagery products, services and solutions to customers around the world. In August 2010, GeoEye was named one of Fortune Magazine's "100 Fastest-Growing Companies" in the United States. The Company has more than 700 employees dedicated to developing best-in-class geospatial information products and services. GeoEye is a public company listed on the NASDAQ stock exchange under the symbol GEOY. Additional information about GeoEye is available at www.geoeye.com
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Without limitation, the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "will" and similar expressions are intended to identify forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to growth, expected levels of expenditures and statements expressing general optimism about future operating results, are forward-looking statements. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements and those presented elsewhere by our management from time to time are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. These risks and uncertainties include, but are not limited to, those described in "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2009, which we filed with the Securities and Exchange Commission ("SEC") on March 12, 2010, and our Quarterly Reports on Form 10-Q for the period ended March 31, 2010, June 30, 2010 and Sept. 30, 2010, which we filed with the SEC on May 10, 2010, Aug. 9, 2010 and Nov. 9, 2010, respectively. Copies of all SEC filings may be obtained from the SEC's EDGAR Web site, http://www.sec.gov/, or by contacting: William L. Warren, Executive Vice President, General Counsel and Secretary, at 703-480-5672.
SOURCE GeoEye, Inc.
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